09/21/2008 11:00PM

Top Illinois court won't review casino ruling


CHICAGO - The Illinois Supreme Court on Monday declined to reconsider a unanimous court decision it issued in June ruling in favor of racing interests and against four Chicago-area Illinois casinos.

By refusing to reconsider the ruling, the court left the casinos with one final legal option - an appeal to the U.S. Supreme Court - before about $80 million in an escrow account is distributed to the racing industry.

The legal proceedings stemmed from a 2006 law passed by the Illinois state legislature that directed 3 percent of adjusted gross receipts from the state's top-earning casinos into a fund to benefit horse racing. The law meant to compensate racing interests for business lost to casinos, which were legalized here in 1990. Racing interests argued that the advent of casino betting cut heavily into ontrack wagering. The casinos said expansion of offtrack betting opportunities, through construction of betting parlors and in-home betting, were to blame for declines in ontrack handle.

The affected casinos filed a lawsuit shortly after the law was passed, claiming that it was unconstitutional because not all casinos in the state would have to contribute. A district court judge ruled in favor of the casinos' suit in 2007, but the state Supreme Court unanimously overturned that decision, ruling to uphold the legislation, on June 5. Three weeks later, the casinos asked the Court to reconsider its decision, if nothing else delaying issuance of the funds for several months.

The casinos have a 90-day window to appeal to the U.S. Supreme Court, but if they are going to do so, an appeal will likely be filed within 35 days, according to Shelley Kalita, an attorney for the Illinois Racing Board, which will administer the casino funds. In 35 days, the Illinois Supreme Court will issue a mandate releasing funds held in escrow for the more than two years since the impact fee became law, and an appeal at the federal level would come before that mandate was issued, Kalita said.

The escrow fund grew to almost $80 million before the impact-fee law expired this past summer. Racing interests are lobbying legislators to extend the law this year. The money will be divided between harness racing and Thoroughbreds, and further cut up between purse accounts and track operators.